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Helton Law Firm, PLLC

Proposed law change could alter alimony payments

It is possible that Tennessee residents could be paying taxes on the alimony paid to their former spouses. Under the current version of the Tax Cuts and Jobs Act, the tax deduction given to those who make alimony payments would be eliminated. As those who pay alimony generally pay a higher tax rate, it could mean lower payments each month. In most cases, any request or order to pay alimony takes the impact of taxes into account.

Therefore, it is possible that a court would simply order lower support payments per month based on a person's ability to make them. In most cases, alimony is paid by the spouse who earns substantially more than the other. The length of time that a couple has been married may also play a role in determining whether a spouse is entitled to support after a divorce.

The reason why the alimony deduction may be eliminated is because there is a difference between what alimony payers and recipients are claiming on their tax returns. In 2010, there were over $10 billion in alimony deductions claimed, but there was about $2.3 billion less reported by recipients of those payments. In 2015, $12.3 billion in alimony deductions were claimed by 598,888 people.

In most cases, alimony is designed to support an individual who may lack the ability to make ends meet after a divorce. Alimony may be ordered by a judge or be part of a prenuptial agreement. It may also be negotiated privately as part of the settlement. An attorney may help those who are seeking spousal support get what they may be entitled to. Legal counsel may also help those who are making payments obtain a modification or have it terminated if a former spouse finds another form of support.

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